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How to make click-and-collect win-win for you and your customers

20th Oct 2014
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With the aim of creating a seamless shopping experience for omnichannel consumers, click-and-collect technology has arguably made one of the most transformational impacts within retail in recent years. Research by PwC and AT Kearney shows that 80% of customers research their purchases online, but 75% of consumers still prefer to buy products in a physical store. To maximise the potential of this, the large retail giants are constantly evolving their propositions to suit. Argos, for example, recently announced that 650 stores will allow eBay customers to pick up deliveries by the end of this year. 

Despite this, as retailers get into full swing preparing for the Christmas season, there’s no doubt home delivery will still continue to lead over click-and-collect this winter as consumers’ preferred choice for order fulfilment.

So what’s holding click-and-collect back? The simple answer is an underutilisation by smaller and medium sized retailers.

Shoppers love to collect in-store for a whole host of reasons. These include being able to get orders faster by reserving a product and picking-up the same day at their favoured store, avoiding the costly shipping and delivery fees, which can also cause hesitation at the check-out stage online, and an easier more convenient physical location in which to manage returns and seek expertise.

For the retailer, more options for consumers to purchase with convenience means more online sales during the checkout process. Through click-and-collect, online commerce can become the driving force behind in-store traffic with increased numbers of motivated shoppers visiting local stores where they make additional purchases. By allowing online shoppers access to the inventory and service resources of local retail stores, products can also be added to an online mix that are typically too challenging for sale online.

Too complicated?

However, despite the obvious benefits, many retailers still hold the view that the technology is too complicated and costly to warrant investment. Many view click-and-collect as a process of manual cogs, sending a package from a warehouse or vendor to a local store which inevitably takes too much time with the end result being that customers lose patience.

In truth, yes, click-and-collect does take a little effort to implement, but the positive effect on the bottom-line is too considerable for any retailer, great or small, to ignore. Retailers need to consider the point-of-view of the consumer or else risk losing out on a valuable share of the market to competitors. Shoppers want instant access to goods; they want to know 'what could I collect from the store right now?’, and will favour retailers offering this.

Look at the early adopters on the high-street, big chain retailers have found convincing evidence that click-and-collect is worth it. A third of Argos’ business is click-and-collect according to Reuters, with 650 stores allowing eBay customers to pick up deliveries by the end of this year. John Lewis also reported a 62% increase in click-and-collect orders last year, according to Bloomberg.

Simply put, if you aren’t offering in-store pickup, your customers are probably shopping somewhere else that does.

Which click-and-collect technology is right for me?

Click-and-collect isn’t complicated as long as a retailer enables conversations between their online store and retail locations and the ability to provide a real-time feed of available inventory to the customer. This will instantly allow the customer to know if they can pick up their order in their preferred store. But whilst gaining insight into inventory across the retailer’s enterprise enables a smoother experience, it also unlocks other cross-channel fulfilment scenarios, and when considering technology solutions, it is important to choose a method that enables the fulfilment solutions of the future.

Several factors should be considered by retailers looking to fulfill orders placed online and enabling in-store pick-up. Whilst many solutions might meet an immediate click-and-collect need, it’s important to consider the costs for adding additional store-based fulfilment capabilities in the future, such as ship-from-store, which is a natural extension of click-and-collect, because store staff will already be used to handling online orders in-store.

Additionally, the decision whether to custom build a solution, license an on-premise software, or deploy a Cloud-based Software as a Service is critical to the overall ROI of a click-and-collect solution. Increasingly, Cloud-based solutions enable a very low-cost of ownership, some even enabling no-cost entry options for proof-of-concept.

Different flavours

There are several ‘flavours’ of click-and-collect. The most sophisticated is collection from inventory that is already in the store. To make this happen, typically a nightly feed of inventory is sent from participating stores to an order management system, with changes in inventory recorded throughout the day. This allows online shoppers to see real-time available inventory in store, and enables them to buy products for same-day collection, sometimes within an hour or two.

Alternatively, ship-to-store allows an online shopper to have an item delivered to the store from a distribution centre or supplier and made available for collection when it’s not possible to find an item in stock at a local store. Whilst this ensures consumers get what they want within a specific SLA (ie order by 3pm and collect after tomorrow at noon), the assortment is typically limited to what is available online and in the ecommerce warehouse. Additionally, this incurs delivery costs for the retailer in moving product to the store, or the item is delivered during normal store replenishment, which might take up to a week.

The simplest option, and often a stepping stone to more advanced possibilities, is to enable local search on the retailer’s website, which allows an online shopper to simply see what is available locally. In this case the shopper puts in their postcode in order to see what is in stock at their local store, encouraging them to visit as they will know their size or favourite colour is in stock.

Act now before you’re left behind

The benefits of offering customers click-and-collect are clear, but the possibilities it enables for growth and cross-channel fulfilment in the future are where its true value is. And low barriers to entry for smaller and medium sized retailers make it increasingly more cost efficient. We’re still at the nascent stages of truly embracing click-and-collect, but no doubt its popularity will grow over the coming years as more high-street retailers and brands embrace the technology to boost their competitive edge.

Ultimately, consumers are creatures of habit and still want to shop at the places they know and love. That is until the service they receive becomes notably poorer in comparison to the rest of the market. By using technology to embrace changing consumer demands, fast-moving retailers can unite their bricks and mortar with online and meet this challenge head-on.

John Pincott is managing director, Europe, at Shopatron.

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